In the late 1990s, I made a lot of money during a period when my macro views were absolutely wrong. It turned out to be luck. In 2017, I got out of all indices and focused on a handful of core companies. That turned out to be the right thing to do for us but my macro view, at the time, was incorrect. Right now, I believe the market is driven by macro factors, primarily politics, almost exclusively. I don't have the luxury of being wrong, this time. The markets are being driven by politics. I am acutely interested in several core ideas that I've analyzed as being relevant. Your thread has been excellent for me. I don't care about what you invest in all that much. I do care about your outlook and also some of the others in your thread. I read every post and appreciate having this facility. I'm fortunate to also have many other sources of information. I'm really tuned into the views of the Republican base: Current state. Future prospects of the economy. etc. I'm a bit of a sociopath in that I am laser focused on learning about macro trends in the markets and I'm going to great efforts to extract influence of my own subjective philosophies from consideration on these topics. With respect to investing, what should happen is irrelevant. All that matters is what will happen. It's a shame so few can get past that rabbit hole. So, yeah, I can see into the very near future and I have some low confidence ideas about the medium term. The only long term idea I have is that our energy is going to change in a way that politics will do everything it can to slow down but will not be able to stop. That's why I am a happy Tesla long with a 10 year investment horizon. What the Tesla market cap does on the short term is meaningless to me. I made nothing off the brief shot to $1000. My hospital REIT is going to be doing a nice job 20 years from now. I'm a happy owner. My residential REIT is doing too well. I wish the market cap would go down. The high valuation is diluting the yield and DRIP efficiency. I hold onto it because I'm confident it will do well for us over the next 20 years. If I didn't have such a long view, I would sell it and harvest a lot of money from it. In the last two years, we went from 12 to 11 to 9 companies but that isn't the real picture. Almost all of our money is in 4 companies, at present. We hold no indices and I don't see owning any in the near term. I'm short one company and I hold some puts on another. We still have a lot of cash. I am taking a look at shorting a couple of other companies. Perhaps the core answer to your question is this: I'm in no rush to do anything. There is no penalty for holding cash, right now. At some point, that will change but for now, doing nothing is the path we are taking. Oh yeah, oil. I'm not scared of the sector. I think the Saudis will be selling oil for $15 within the month. Everything in the sector is a blood bath and it's the only sector I'm currently looking at expanding into. What was interesting three months ago is now quite aluring.
By the way, I've been monitoring the bond market as the foundation stone of the US economy. It's in trouble. It's clear it will soon be in big trouble. It's not existential.... yet. A large scale bailout and liquidity injection will be required in 2020; I don't see any way to avoid this. I'm trying to clarify a view of the coronavirus impact. Here is what I have, at the moment. 1st wave: Retail cessation is going trigger large scale layoffs that will freak out the public. 2nd wave: First quarter earning reports are going to reflect systemic problems in the economy. 3rd wave: A sell off, triggered by Q1 ER, is going to cause further problems. 4th wave: Second quarter earning reports are going to be significantly worse than Q1. 5th wave: After initial, inadequate, stabilization fails, large scale stabilization will need to be implemented. 6th wave: Q3 should be significantly up from Q2 but not back to current levels. I see a tough year. Election: I believe the 2020 election is going to have a major impact on the US economy by the end of this year. Our response: - we are currently in austerity mode - DRIPs off - hold any company that is not under existential threat from a few bad quarters in a row, sell everything else (this was done by the end of January) - hoard cash Bright spots: - Residential REITs - Healthcare REITs - Senior care companies that aren't corrupt (I haven't been able to find a REIT I feel is equitable for investors and I've been searching for a decade but there are a couple of items here) - CRISPR/cas9
I had a plan to sink our cash into the market on the way down, in stages, at various discounts. That plan was stopped three weeks ago when I realized there would be a crater where the economy used to be. It was really difficult to invest against the economy with one short and buying a put. A lesson I learned some decades ago is: be aggressive when market conditions become clear. It's a shame I get to learn that lesson a few times per year for decades. All that matters now is having cash. The guidance during a SHTF situation is: Don't make a move until there is blood running in the streets.
I watch more YouTube content than I do television. GenExDividendInvestor and Independent Investor are a couple of my favorite channels I follow.
CNBC, Bloomberg, etc. after the closing bell shows have interviewers asking why we don't just close the markets until this all blows over. I find myself wondering how these morons can work a camera. Holy cow.
I don't think many people understand the severity of the current financial problem. It is going to be more severe than the gfc. Cash is King. No rush to spend.
Is anyone brave enough to consider the political future? We are heading into a financial apocalypse and the presidency is being contested. This question is regarding what you think will happen in the event each of these two men are elected. It is not a poll soliciting opinions on who you think should be elected. Just what you think might come of either presidency. I am throwing fiscal policy into the list because Trump wants to set fiscal policy and seems to have considerable influence over it; at least, interest rates. I am happy to share my opinions but will let others go first, if they wish. Use a scale or narrative, whatever you wish. I suggest we consider the following categories on a 1 to 10 scale. Please add more, if you have ideas that don't fit here. Optimism (1-10) Fiscal responsibility (1-10) Empoyment (1-10) Fiscal Policy (1-10) Market investment (1-10) Trade (1-10) At this point, Bernie is essentially out of the race so it comes down to Biden and Trump. What would happen in each case, if they are elected? Biden: Optimism (1-10) Fiscal responsibility (1-10) Empoyment (1-10) Fiscal Policy (1-10) Market investment (1-10) Trade (1-10) Trump: Optimism (1-10) Fiscal responsibility (1-10) Empoyment (1-10) Fiscal Policy (1-10) Market investment (1-10) Trade (1-10)
In my opinion, this is not a crash. It is an apocalypse. I have no idea how low it will go or when it will end. All I know is there is currently no end in sight. Consequently, we are hanging onto our cash.
This is a legit question..... If this is a financial apocalypse....or whatever it ends up being..... Are we justified in destroying the worlds economy and throwing the entire world into turmoil in order to prevent a virus that will in the end have a death rate of about .7% to 1%? Will the world wide death rate from the impact of destroying the world economy exceed the virus death rate? We dont blink an eye at a normal Flu death rate EVERY YEAR of .4%.......AND.......in a bad Flu year perhaps .7%. At what point should we just allow everything to be open and allow the virus to spread and create world wide immunity going forward.....as well as......the end to this virus panic? I believe we are already at the point of........the cure will be FAR WORSE than the disease.
I'm of the opinion that what should happen is of no relevance. All that I care about is what will happen, regardless of how crazy it may be. I've heard the death rate of COVID-19 estimated at between 0.6~1%. It was from a credible source (ie: someone who has studied epidemiology, not a partisan pundit). That's 6 to 10 times the lethality of the flue which remains at 0.1%. Probably. On the other hand, the reduced polution from dramatically reduced industrialisation is saving lives. Our air is cleaner than it's been in many decades. A lot more is going to come out of this than just financial devistation. We've seen what happens to the atmosphere when we stop crapping in it. I don't know when I became a sociopath but I am fixated on profiting from this or, at least, losing the least amount of net worth. As of right now, we are down a lot of money, on paper. Those loses won't be realized until our symbols stop trading because we have no intention to sell anything. That will be a positive inflection point but I don't believe it will restore the economy. We will be many years shovelling our way out of this hole. Still, that will be the point we start the return toward normalcy. I'm with you. From a non-financial point of view, it would seem the only two reasonable approaches are to do mass isolation as early as possible for a period equal or longer than the incubation period or to simply ignore it. It will be interesting to see if any country follows the latter approach and to see how their results compare to the rest of the world, once all is said and done.
Given China has been dealing with COVID-19 for 3 months and they just barely have it stabilized, at this point, I see no chance for North America skating away from this in April. The China comparison is particularly interesting since their response was far more severe than ours currently is or is likely to ever be. We have seven states that have done nothing at all (Texas, Wyoming, Tennessee, Mississippi, Oklahoma, Idaho, Missouri). The states that are doing nothing will be interesting to compare their trajectory to the rest of North America.
I've been thinking about the number of facebook friends I have, the average age of my friends, and the mortality of COVID-18. Several friends I haven't seen in a few years and now only follow on facebook will not be there a year from now. I'm old enough that losing friends is all too frequent a reality but will be a rather large purge. Consider how many people on are on this site. 5700? There are perhaps a hundred, or so, people who post occasionally. One or more of us won't be posting ever again a year from now. It's not like any flu I'm familiar with.
Agree with you @TomB16. Anyone making light of the situation is either naive to it, or being fed false info from somewhere. It's pretty sad it's happening. When I say making light, I don't mean posting an occasional humorous meme about there being no toilet paper. I mean telling people you're going to go about your life as if nothing has changed. My wife is an ER nurse and up until maybe 10 days ago even she was blown away at what she called an overreaction. "It's just like a cold/flu" she told me. Many times. I tried explaining to her it was not. She was annoyed when stuff in IL was getting shut down. Once it happened though, and she started digging more, she started seeing more studies coming out of Italy, pictures of hundreds of coffins piled up in churches because funerals are not allowed to happen, etc. She's now fully on board with "EVERYONE STAY THE FUCK HOME". She's started having breakdowns the last 2-3 days because they are basically out of PPE at the hospitals. They're using equipment that's designed for single use all day, washing it, and then others are also using it. Not allowed to bring anything of their own in. She said the day they try to send her in to a potential covid patients room without PPE, she will quit. Thankfully we could survive without her pay most likely (assuming I don't lose my job out of nowhere). She's terrified of bringing it home to our almost 3-year old kid with fairly severe asthma. It amazes me that there's not more outcry to get more PPE for healthcare workers and others on the front line. She gets extremely mad/sad when she sees pictures comparing countries healthcare workers. Almost every country she sees are in full body suits while they're lucky to have standard American PPE that you've seen used every time you've been to the hospital.
For my part, this isn't like the flu and it also isn't the end of the world, from a medical point of view. It will overwhelm every healthcare system that deals. When I think about the folks likening COVID-19 to the flu, I wonder if they have seen the mass graves in Iran and Italy. This thing is an order of magnitude more lethal and vastly more contagious than the flu. Throw in being contagious prior to being symptomatic and you have a major global problem. Still, the vast majority of people will survive OK. Financially, this might be the end of the world. We don't know how re-starting industrialization is going to go. We know China had some problems for a few weeks but production is OK now, even under virus control conditions. What's going to happen when 1Q earning reports come out in 4~6 weeks? I assume all ER will be delayed, "due to the virus", with the reality being they want to delay the bad news as much as possible. Bad Q1 numbers will stick with us like a horrible stench until summer when worse Q2 numbers deal the markets an even more severe blow.
It will only overwhelm the healthcare system if everyone become sick in the same period. That was what happened in Italy and because off that doctors has to make horrific live or death decisions. To prevent that, people must isolate themselves en that is what we are doing in Belgium, by the end of next week we will see if it works!
Thanks Tom, wish you and your family the same. Every non essential business is closed in Belgium and most people are working from home via internet, even my son who is in the army is at home and stays in contact with his soldiers via internet, his base is closed, only guards are there.
At this point, the value from the CSSE coronavirus tracker is extremely minimal. They track about 430K and some of the trends seem accurate but I speculate they track perhaps 10% of cases, at most. Confirmed cases now exist in Alaska, North West Territories, and Greenland. Countries which don't report cases are simply not doing so. It's now down to slowing the infection rate as much as possible. Avoiding corona is no longer possible. The best case death rate I've heard from someone credible is 0.6%. I suspect the real death rate will turn out to be under 2%, on the high side. That means between 48 and 160 million people will lose their lives in the next couple of years. Forget the 2 week quarantine. It's going to take months. 2 weeks wouldn't help, anyway. The point is to delay some cases to give the healthcare system an opportunity to treat more people. Someone with a weakened immune system at a critical point in their struggle is going to require 3 weeks of hospitalization, at a minimum. Perhaps there exists a small minority of people who could be saved with one week on a respirator during the worst of the pneumonia stage. If we can slow the spread to one quarter speed, we should be able to treat four times the people. That might cut the death rate by a quarter. I'm still bullish on cash. When you don't know what to do... cash. When interest rates are 0%.... cash.
Yesterday, I had a buy order in to expand my PSQ position. The order was for $28. PSQ went below $28 in the morning but the order was never filled. I have the option to engage include after hours trading, which likely would have filled, but I didn't bother with it. Today, I picked some up at $26.90. I've picked up a non-trivial amount of cash from some contrary positions. PSQ is the only contrary position I have that is currently open. These gains have offset a small portion of our losses but we are still well down from February peak.
COVID-19 infections are now doubling every 3 days in New York. Formerly doubling every 4 days. This could be a case of increased testing revealing more infections from earlier in the spread. Either way, I need more PSQ.....
